Project Management- chapter 5

Why should project task time, cost, and resource estimates be based on "normal conditions"?

-Normal conditions provide a common frame of reference for interpreting the estimates. -Normal conditions prevent overly optimistic estimates.

Which of the following factors will influence the quality of a project's time or cost estimate?

-Organization culture -Project management structure -Project duration

Direct costs are real cash outflows expended as a project progresses and may be influenced by which of the following?

-Project Team Member. -Project Manager. -Work Package Leader.

Which of the following is considered a direct overhead cost?

-Salary of the project manager -Temporary rental space for the project team

Good time and cost estimates are needed within project execution to allow a project manager to do which of the following?

-Support decision making -Schedule work -Monitor project progress

Identify the true statements about general and administrative (G&A) overhead costs. (Check all that apply.)

-These represent organization costs that are not directly linked to a specific project. -These costs include organization costs across all products and projects such as advertising.

Which factors make it most difficult to accurately estimate the costs and benefits of mega projects?

-Time horizon -Complexity

Identify the main reasons why the project cost estimate is broken down into direct costs, direct project overhead costs, and general and administrative overhead costs.

-To sharpen the control process -To improve decision making

___ - ____ estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost.

-Top -Down

____ - ____ estimates usually are derived from someone who uses experience and/or information to determine the project duration and total cost.

-Top -Down

Range estimating will provide an estimation for a "high" and "low" cost and/or time frame to complete a project. Which project characteristics would need this type of approach?

-When work packages have a high degree of uncertainty. -Software/technology projects with relatively unknown requirements.

Top down estimating for projects is best suited for situations when ___.

-a WBS cannot easily be defined. -project proposals are being evaluated.

We can push the estimating process down to the work package level for ____ - ____ estimates that establish low-cost, efficient methods.

-bottom -up

____ is used when projects closely follow past projects in features and costs.

Apportionment

Establishing cost and time estimates will allow a project manager to do which of the following?

Control the project

____ costs represent real cash outflows and must be paid as the project progresses

Direct

What is a primary reason for using several people to generate a time or cost estimate for a project rather than have a single estimator do all the estimating?

Eliminates extreme estimates.

Why is top down estimating generally not effective at developing a low cost project estimate?

Estimators may be influenced by the proposed budget.

What estimating influence is described by the general statement that some organizations encourage padding of estimates while others discourage the practice and want the most realistic and/or accurate estimate?

Organization Culture.

____ techniques can be applied to specific tasks.

Parametric

Which is a significant concern with using consensus for top-down project estimating?

People may yield to the opinion of the highest ranking person in the room.

Why is bottom up estimating generally considered more accurate than top down?

Using the WBS detail allows for more accuracy.

Sometimes, top-down estimates are used until the tasks in the ____ are clearly defined.

WBS

After project execution begins, at what point in a project should time and cost estimates be reviewed for change?

When there is any change to the project scope

Cost of labor, materials, and equipment are examples of _____ costs.

direct

Learning curves describe the relationship where each time the output quantity ____ , the unit labor hours are reduced at a constant rate.

doubles

A worker can perform a task ____the second time and each succeeding time she performs it.

faster

Estimators should treat each task as ____ of other tasks that might be integrated by the WBS.

independent

What are the benefits of using past project estimates and actuals to create a new project estimate?

-Actuals from past projects provide benchmark measurements. -Past projects can provide specific work package information.

Which costs are examples of G&A overhead costs?

-Advertising -VP of Sales

What are the benefits of using the resource (person) most familiar with a task to do estimating?

-Builds communication channels early. -Increases probability of accurate estimates. -Establishes "buy in" for the project.

Apportionment is a multi-faceted top down estimating approach used in which of the following situations?

-Estimating a project that closely follows past projects in features and costs -Estimating a relatively standard project with small variation or customization

Which statements are correct about the influence that a planning horizon has upon project estimates?

-Estimating is more accurate after the individual work packages have been defined. -Near term event estimating is more accurate than long range planning.

What "people factors" influence the quality of the project estimates?

-Familiarity with the task -Individual skills

Which of the following statements summarize why estimates are generally so inaccurate?

-Flaws in the estimating process -Uncertainty in predicting the future

What are the project characteristics that would benefit from phase estimating?

-High degree of scope uncertainty -Long duration with progressive design

Why is keeping task estimates independent of each other needed for sound project planning?

-It considers the uncertainties of individual activities. -It prevents developing optimistic task time estimates.

Which of the following are potential impacts caused by padding time or cost estimates?

-chances for realistic estimates are reduced -the project duration and cost are seriously overstated

The 5- to 10-day rule of thumb applies to ____ and ____ goals of a project.

-cost -performance

A white elephant mega project is one that is ___. (Check all that apply.)

-cost exceeds benefits -over budget -under value

In the software industry, software development projects are frequently estimated using weighted macro variables called ____ ____ or major parameters such as number of inputs, number of outputs, number of inquiries, number of data files, and number of interfaces.

-function -points

Many firms collect time and cost data through the ____ ____.

-project -office

The main disadvantage of top-down approaches to estimating is simply that the time and cost for a specific ____ are not considered.

-task

A new technology usually carries more ____ and cost ____ than a proven process. (Enter only one word per blank.)

-time -risks

There is growing evidence that some project promoters ____ the costs of projects and ____ project benefits in order to win approval.

-underestimate -overestimate

For projects with a standard time unit of days (most typical), what is the rule of thumb for duration of an individual work package within a work breakdown structure?

1 - 5 days

Which of the following improvement ratios represents the largest learning rate?

70

Factors outside of the organization, project team, or project itself may influence which aspect of a time/cost estimate?

Accuracy of the estimate

Top down and bottom up estimating both use parametric (ratio) estimating, the difference is that...

Top down looks at the project as a total unit, whereas bottom up looks at individual tasks.

True or false: Poorly written scope statements for new technology lead to errors in estimating times and costs.

True

Why is the accuracy of estimates for current events greater than that for more distant events?

Uncertainty increases over time.

Why is past experience the best starting point for creating quality time and cost estimates?

While projects are unique, many elements are similar to past work.

Why is bottom up estimating generally considered more accurate than top down?

Work packages are individually considered/estimated.

Estimating a project's time and cost should be __.

a continual process rather than a one time event.

Range estimating works best when work packages have significant uncertainty, and ______ estimation will usually arrive at a more reasonable average.

a group

Development of templates in a ____ can quickly reduce estimate errors.

database

Project promoters are often accused of using ___ to promote mega projects?

deception

Estimates are supposed to be based on ____ conditions.

normal

True or false: A learning curve is most applicable in non-repetitive tasks.

False

Detailed work package estimates are aggregated and "rolled up" by deliverable to estimate the:

total direct cost of the project.

What factors inherent to dedicated project team structures will improve the quality of time and cost estimates?

-localized project decisions -concentrated focus

Work package estimates should assume ____ or ____ conditions, even though every work package will not materialize as planned.

-normal -average

A simple breakdown by ____ , most ____ , and ____ for task time could provide valuable information regarding time and cost.

-optimistic -likely -pessimistic

Which are project factors that would tend to require a greater level of detail in a work breakdown structure (WBS) used for estimating?

A high degree of project complexity. A need for tight budget or time control.

Match the factor that causes inaccurate time and cost estimates to its root cause because of which the factor occurs. Normal conditions do not apply----> Scope creep----> Things go wrong---->

Normal conditions do not apply----> Estimations should be based on past experience with resource availability, but while this is a good starting point, it rarely holds true during a project. Scope creep----> As the project progresses, a manager better understands what needs to be done to accomplish the project; plans may change without adequate documentation. Things go wrong----> The guideline is not to plan for disaster or accidents while estimating a specific task, but in reality, events happen which affect time and cost estimates.

The ____ method is an extension to the ratio method.

apportionment

Drawing on the expertise of team members who will be responsible helps to build ____ channels early.

communication

Project estimating is a ____ process.

complex

Network analysis requires a ____ unit of time.

consistent

Work package estimates should not include allowances for ____ .

contingencies

Organizational ____ shapes every dimension of project management.

culture

Contractors frequently use number of square feet to estimate the cost and time to build a house. This is an example of the top-down ____ method.

ratio

Top-down methods, sometimes called parametric, usually use ______ to estimate project times or costs.

ratios or surrogates

Middle management might center on one ____ of the project.

segment

Time to implement new ____ has a habit of expanding in an increasing, nonlinear fashion.

technology

If the project is similar to past projects, then ____ methods can be used as a starting point for the new project.

template

The use of ____ is the dominant choice for expressing task duration in project management.

workdays

The time estimate should represent the ____ level of resources.

normal

Which approach to estimating is usually coordinated by a project manager/office and is a "roll up" of individual estimates from work breakdown structure elements?

Bottom Up

When the learning curve can be applied, what effect does it have on project estimation?

Increases accuracy of time and cost estimates.

The ____ method simply uses the pooled experience of senior and/or middle managers to estimate the total project duration and cost.

consensus

All task time estimates need ____ time units.

consistent

Using several people to make an estimate is sometimes called " ____ ".

crowdsourcing

____ projects are large-scale, complex ventures that typically cost $1 billion or more, take many years to complete, and involve multiple private and public stakeholders.

Mega

Which type of project lends itself to the function point method of top down estimating?

Software development.

Which process best describes phase estimating utilization of micro (bottom up) and macro (top down) methods?

A repetitive cycle of micro for short term and macro for the remainder of the project.

Flyvbjerg advocates an external view based on the outcome of similar mega projects completed in the past. It is called reference class forecasting (RCF) and involves three major steps. Which of the following is not one of those steps?

Collect estimates of cost and duration from all of the top managers for the project.

Bottom up estimating is considered by the authors to be more accurate than top down because...

It considers specific tasks.

Which of the following statements regarding learning curves are true?

Labor hours reduce at a constant rate each time the output quantity doubles.

One of the major advantages of a dedicated project team is the speed gained from concentrated focus and localized project decisions, what is the additional cost of that speed gained?

Personnel are 100% allocated to that project.

____ estimating is used when an unusual amount of uncertainty surrounds a project and it is impractical to estimate times and costs for the entire project.

Phase

According to project estimation guidelines, each task estimate is supposed to be done independently of other tasks. Why does this lead to inaccurate estimates?

Task interdependencies influence actual time and cost requirements.

Which approach to estimating project time and cost is usually completed by upper management?

Top Down

Time and cost devoted to managing ____ rises exponentially as the number of people and different disciplines involved increases on a project.

interactions

Top management interests usually center on the total project and major ____ events that mark major accomplishments.

milestone

Direct ____ rates more closely pinpoint which resources of the organization are being used in the project.

overhead

In some cases people are inclined ____ to estimates. (Enter only one word per blank.)

pad

The ____ factor can influence the quality of time and cost estimates.

people

At the work package level, estimates should be made by the ____ most familiar with the task.

person